Stability secured with synchronised system of special economic zones

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EXCLUSIVE INTERVIEW
Stability secured with synchronised system of special economic zones
WIRAJ SRIPONG
THE NATION


Arkhom Termpittayapaisith

BANGKOK: -- MARTIAL LAW, which had raised concerns among local and international investors as increasing business risk for them, was in fact one of the factors that boosted confidence in the special economic zones in border areas, Deputy Transport Minister Arkhom Termpittayapaisith said last week.

Thailand is working to materialise a plan to become Asean's economic hub. Several measures to encourage and facilitate investment in the SEZs are being discussed and on their way to being implemented, he said.

"The government aims to create a synchronised system of SEZs by providing them with sufficient infrastructure," said Arkhom, who is also secretary-general of the National Economic and Social Development Board.

The government plans to boost investor confidence in the SEZs by instituting policies to assure political stability, granting privileges to investors through the Finance Ministry and Board of Investment (BoI) and forging connectivity with neighbouring countries under the concept of "Thailand Plus One".

Martial law, which covers the whole country, is a measure referred to as "draconian", but it assures internal stability, enabling an environment that is friendly to economic activities.

"We have to look at martial law as a measure to build investor confidence, especially during this time," he said.

The national process of reconciliation would certainly take time, but when the new charter goes into force, the situation will return to normal.

The economic policies of this government remain anchored on the same set of rules that assure investors of a suitable climate for investment.

"Recently, the National Legislative Assembly (NLA) ratified the Cross Border Transport Agreement and adopted five bills to facilitate the free movement of goods," he said.

As for the issues related to insurance for industries investing in border areas where martial law is still being implemented, the prime minister promises to find suitable solutions to respond to investors' needs.

Only some groups of investors are worried about the consequences of martial law enforcement.

"Many business groups have been in Thailand for a long time and still remain here despite some ups and downs in Thai politics. This means it [martial law] does not have an impact," he said.

Among all the incentives granted by the BoI, investors would be allowed to receive a waiver of corporate income tax and of import duties on machinery as well as permission to employ foreign workers in labour-intensive industries.

As an alternative to the BoI's tax breaks, investors could also opt for incentives granted by the Finance Ministry, which would also allow a reduction in corporate tax from 20 per cent to 10 per cent for 10 years.

"Thailand Plus One" would accompany SEZ projects, so Thailand could forge more links with neighbouring countries.

"Any Asean investor can invest in the SEZs to receive privileges from Thailand plus bordering countries such as Myanmar, Laos, Cambodia and Malaysia," he said.

Thailand Plus One is a strategic business model initiated by Japan's corporations in 2012 to encourage investors to maintain their main operations in Thailand while diversifying supporting production in the supply chain to neighbouring countries for comparative advantage.

Areas such as Mae Sot and Aranyaprathet are pioneers in creating linkages among Thailand, Myanmar and Cambodia.

Plans to build roads and other infrastructure would soon be implemented.

A tripartite working relationship between Japan, Thailand and Myanmar on the Dawei port project has been envisioned, with Thailand taking part in the first phase of road development.

Aranyaprathet's proximity to Cambodia makes this location suitable for the development of logistics between Thailand and Cambodia, he added.

This is the final report in a series by The Nation on special economic zones to deepen economic integration in the Asean community with developed border areas.

Source: http://www.nationmultimedia.com/politics/Stability-secured-with-synchronised-system-of-spec-30257025.html

-- The Nation 2015-03-30